State aid: Commission approves €50 million Italian support scheme for production and supply of medical equipment and masks during Coronavirus outbreak

mask covi

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has approved a €50 million Italian aid scheme to support the production and supply of medical devices, such as ventilators, and personal protection equipment, such as masks, goggles, gowns, and safety suits. The scheme will help Italy provide the necessary medical treatment to those infected, while protecting healthcare operators and citizens. The scheme was approved under the State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak adopted by the Commission on 19 March 2020. The Commission approved the scheme within 48 hours from receiving the notification from Italy.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “These are very difficult times, especially in Italy. We have to do what we can to mitigate the impact of the Coronavirus outbreak on human lives and livelihoods. The Italian scheme approved today, shortly after the adoption of our new State aid Temporary Framework, will support companies ready to produce and supply medical equipment and masks. These are needed urgently. We will continue to work with Member States to ensure timely, coordinated and effective action.”

The Italian support measures

Italy notified to the Commission a €50 million support scheme for the production and supply of medical devices and personal protection equipment under the Temporary Framework.

The scheme aims at increasing the market output of such devices and protection equipment, which has proven to be insufficient as a result of the peak in demand arising from the Coronavirus outbreak.

Under the scheme, financial support will be available to companies of all sizes which (i) set up new facilities for the production of medical devices and personal protection equipment; (ii) expand the production of their existing structures producing such equipment; or (iii) convert their production line to that effect. The beneficiaries of the support will make the products available to the Italian authorities at the market prices applied in December 2019, i.e. prior to the outbreak in Italy.

The aid will take the form of direct grants or repayable advances. The repayable grants will be converted into direct grants, if the beneficiaries supply the equipment and devices in an expedited manner to the Italian authorities.

The scheme will ensure swift and adequate support to companies ready to produce and supply medical devices and personal protection equipment and will incentivise rapid production and timely delivery of these essential products.

The Commission found that the Italian measure is in line with the conditions set out in the Temporary Framework for aid in the form of direct grants and repayable advances. In particular, under the scheme, the support will not exceed €800 000 per company as foreseen by the Temporary Framework.

The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

On this basis, the Commission approved the measures under EU State aid rules.

Background

The Commission has adopted a Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the Coronavirus outbreak. The Temporary Framework provides for five types of aid, which can be granted by Member States:

  1. Direct grants, selective tax advantages and advance payments: Member States will be able to set up schemes to grant up to €800,000 to a company to address its urgent liquidity needs.
  2. State guarantees for loans taken by companies from banks: Member States will be able to provide State guarantees to ensure banks keep providing loans to the business customers who need them. These state guarantees can cover loans to help businesses cover immediate working capital and investment needs.
  3. Subsidised public loans to companies: Member States will be able to grant loans with favourable interest rates to companies. These loans can help businesses cover immediate working capital and investment needs.
  4. Safeguards for banks that channel State aid to the real economy: Some Member States plan to build on banks’ existing lending capacities, and use them as a channel for support to businesses – in particular to small and medium-sized companies. The Framework makes clear that such aid is considered as direct aid to the banks’ customers, not to the banks themselves, and gives guidance on how to ensure minimal distortion of competition between banks.
  5. Short-term export credit insurance: The Framework introduces additional flexibility on how to demonstrate that certain countries are not-marketable risks, thereby enabling short-term export credit insurance to be provided by the State where needed. The Commission will continue monitoring the situation and stands ready to amend the list of marketable risk countries if needed.

The Temporary Framework will be in place until the end of December 2020. With a view to ensuring legal certainty, the Commission will assess before that date if it needs to be extended.

The Temporary Framework complements the many other possibilities already available to Member States to mitigate the socio-economic impact of the Coronavirus outbreak, in line with EU State aid rules. On 13 March 2020, the Commission adopted a Communication on a Coordinated economic response to the COVID-19 outbreak setting out these possibilities. For example, Member States can make generally applicable changes in favour of businesses (e.g. deferring taxes, or subsidising short-time work across all sectors), which fall outside State Aid rules. They can also grant compensation to companies for damage suffered due to and directly caused by the Coronavirus outbreak.

The non-confidential version of the decision will be made available under the case number SA.56786 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

More information on the temporary framework and other action the Commission has taken to address the economic impact of the Coronavirus pandemic can be found here.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

What’s the latest on coronavirus antibody tests?

Remembering Kofi Annan

Female leaders warn about the erosion of women’s rights

Yemen: Escalation in fighting must stop ‘before it’s too late’, Griffiths tells Security Council

Romania: MEPs are deeply concerned about judicial independence and rule of law

Zuckerberg, a paella, and the mighty EU questionnaires that would stop Whatsapp acquisition by Facebook?

UN cultural agency removes birthplace of Jesus from its list of heritage sites in danger

How the massive plan to deliver the COVID-19 vaccine could make history – and leverage blockchain like never before

EU tourism industry expects a new record year in 2014

Youth leaders share positive visions of the future, as Guterres launches UN75 in New York

Apple Vs. EU: Will the US tech giant ever pay for taking advantage of Ireland’s taxation?

COVID-19 lessons learned: stronger role for EU medicines regulator

Mergers: Commission prohibits Siemens’ proposed acquisition of Alstom

A Sting Exclusive: “There can be no global deal on emissions without China and the USA”, Conservative MEP Ian Duncan stresses from Brussels

UN forum spotlights cities, where struggle for sustainability ‘will be won or lost’

This is the state of the world’s health, in numbers

Peru is building a new international airport near Machu Picchu – and archaeologists are worried

The new ethical dilemmas in medicine of the 21st century

Commission extends transparency and authorisation mechanism for exports of COVID-19 vaccines

Is the world living up to its climate commitments?

A Sting Exclusive: “Asia-Pacific response to COVID-19 and climate emergency must build a resilient and sustainable future”, by the United Nations Under-Secretary-General

Fed, ECB take positions to face the next global financial crisis; the Brits uncovered

The gender gap in medicine: why must it be closed?

Trump: Hostile to Europe, voids Tillerson’s “ironclad” ally pledge

Eurozone in trouble after Nicosia’s ‘no’

The future of energy is being shaped in Asia

Vaccine against Ebola: Commission grants first-ever market authorisation

Five ways individuals can help save the oceans

Why remote working doesn’t have to mean alienated employees

3 principles to reinforce digital trust in supply chains

Food safety critical to development and ending poverty: FAO deputy chief

Commission welcomes political support by Member States to improve the protection of bees

UN panel to rally global political will to tackle internal displacement crisis

Deal on digitalisation of access to justice will benefit citizens

How the digital finance revolution can drive sustainable development

Commission Vice-President Rehn exaggerates Eurozone’s growth prospects

This NASA-inspired technology converts carbon dioxide into food. Here’s how

How cities, not states, can solve the world’s biggest problems

How to stop plastic pollution at source

Working fewer hours makes you more efficient. Here’s the proof

Mexico cannot move forward ‘without addressing the shadows of the past’, says UN rights chief

Rule of law: MEPs travel to Malta to meet with government, NGOs and journalists

Tsipras imposes more austerity on insolvent Greece; plans to win new early election soon

Coronavirus: here’s what you need to know about face masks

A critical European young voice on Net Neutrality: the distance between Brussels and Washington

How to build public trust in a sustainable energy future

Syria: Urgent, concrete actions needed, to protect children too young to ‘make sense of this senseless war’

Universal Health Coverage in the EU: Are we really leaving no one behind?

This Japanese experiment shows how easily coronavirus can spread – and what you can do about it

This start-up is recycling abandoned wooden homes in Baltimore

Conflict prevention, mediation: among ‘most important tools’ to reduce human suffering, Guterres tells Security Council

A European student just sets the question of the day: What kind of education policies are missing in Europe?

MEPs approve new CO2 emissions limits for trucks

Combat against devastating effects of tobacco can only be won ‘if the UN stands united’ – UN health official

State aid: Commission approves €2.5 billion Italian scheme to support self-employed and healthcare professionals in context of coronavirus outbreak

Sudan Prime Minister survives attempted assassination

Yemen war: UN-backed talks to silence the guns due to begin in Stockholm

As Libya talks resume in Geneva, UN negotiator seeks to overcome sticking points

The health of the human being in coexistence with a transformative biosphere

This disability activist says we must offer dignity and financial inclusion rather than just braille and ramps

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s